I have 2 mortgages and one was origination in 2017 and one was origination in 2018, combined they are > 1M, should I follow 750K limit or 1M limit?

[cats881119]

I bought my old place in 2017 and the average loan balance of that place is 454k in 2018, I moved out on July 31, 2018, and converted to a rental starting Aug.1 2017. I am claiming 42.5% rental and 57.5% personal use and split the expense that way. (The loan on that place origination in early 2017)

I bought my new place in 2018 and moved in on Aug.1, the loan for the new place is about 580k .

I know that loan starts before Dec.15 2017 has 1M limit and after that, it has 750K limit.

My question would be :

1. Can I calculate the eligible mortgage deduction amount based on the interest part of my personal use as 454k *  57.5%(personal use percentage for the old place ) + 580k (new place) = around 842k?

2. For this amount, should I use the 750k rule or 1M rule?

Thank you all for your input!

[DDollar]

The mortgage used to purchase your primary residence for the first part of 2018 was $454K.  The interest on that until August 31is fully deductible.  When it became a rental, it became irrelevant to the calculations for your deductible mortgage interest.   For the second part of 2018, your primary residence had a qualifying mortgage of $580K, so the interest on it is fully deductible.  You don't add the two together, or use percentages to determine the cap.  

[cats881119]

Thanks a lot for your reply!  So in conclusion , i can deduct all of the interest,  some goes to schedule E and the rest of it goes to schedule A, and the 750K/1M rule is not relevant to my case, correct?

[DDollar]

You got it!